Wealthy Donors Share Motives and Misgivings

(Sept. 15, 2008) Wealthy donors want to give, but they don’t want to gamble, according to a new report from the University of Pennsylvania’s Center for High Impact Philanthropy. And for lack of quality indicators on what impact their gift will make, they often rely heavily on their peers.

The study was conducted earlier this year and was not meant to be representative of all wealthy donors. Yet through structured 45-minute interviews with 33 donors whose reported average annual giving was $1.5 million, the study offers candid responses about the information donors want and what keeps them from getting it.

“Many [wealthy donors] expressed a reluctance to investigate the effectiveness of potential recipients for fear of inviting unwanted solicitations or appearing distrustful or overly demanding of the nonprofits with which they already had relationships,” notes the report.

Another barrier to having good information about a charity’s programs and management is the lack of good evaluation being done in the first place, some donors said. But many were reluctant to demand such information as it would require precious resources to conduct.

“It’s really hard for people—even for people who have been doing this for a long time. If they don’t have staff doing serious number-crunching analytical work, there’s just not really serious data, as opposed to anecdotal [data] or the new book of someone who’s obviously working an angle,” said an interviewee.

“I mean, other than going out there and staying for a month, I just don’t know how to really figure it out,” said another respondent.

Left without a clear assessment of effectiveness, some donors say they are actually giving less than they had planned to.

“We have not, to date, given at that level because we haven’t established criteria,” said one interviewee.

What’s My Impact?

Wealthy donors said that seeing impact data for gifts is very important before a gift is made and especially before making additional gifts. They said the desire to see the impact of their gift often leads them to fund specific, highly tangible, projects so that they could easily observe outcomes.

It seems persuading wealthy donors to support difficult-to-measure programs or make critical unrestricted gifts may hinge upon a donor’s ability still to track and assess the progress of such activities.

For now, donors have a great reliance on their peers.

When asked, “How important is it to know someone on the board or from your peer group that recommends the issue or organization?” 26 of 33 respondents rated this as either a four or five (out of a five point scale) in importance.

“I can use my network of what I would refer to as trusted sources to feel absolutely confident in the integrity of the organization and the leadership of its projects,” said one interviewee.